2024 Macro single family home prices prediction

[goingplacesanddoingstuff]

I did something crazy. Back in our late 20's we bought a 3-2-2 in May of 1989. Decent but unspecactular. Paid 57K for it, and our mortgage rate even with very good credit was a whopping 10.5%. Being young and unfamilar with finances, I was shocked seeing the amortization schedule they prinited out for me. I was effectivly throwing away money to carry that mortgage and rate.

However, we did not WHINE and CRY and lament "how unfair" the world was like people do today. We buckled down, lived on one of our two incomes, and paid that thing off in 2.5 years. That set us up well for life!

Even with interest rates as they were, the HAI was more favorable to you at that time than it is today. Furthermore, you were able to refi continually for the next 30 years to lower your rate.

You can’t ignore the fact it’s quantitatively less affordable now to buy a house than ever. Your feelings about generational attitudes are irrelevant in light of the hard numbers.

I purchased my first house during the housing recession. I busted my butt to do it, but I don’t kid myself into thinking the timing didn’t also align correctly for me then.

 

[KrisZ]

However, we did not WHINE and CRY and lament "how unfair" the world was like people do today. We buckled down, lived on one of our two incomes, and paid that thing off in 2.5 years. That set us up well for life!

And now apply that to a median home worth 400-500k and see how fast you can pay it off even at a cheap 3% interest.
Your price to income was very good, it is not the same today. Something most old timers don’t seem to grasp. All they seem to look at is their high interest rates.

 

[ls1mike]

I remember buying my first house I saved a down payment by working around the clock hustled any side money I could make. Had zero debt and sold my car bought a beater. Buying a home is doable with sacrifice to get in the door. I don't think the new young ones are willing to sacrifice.

I don't know man. I paid 114,900 for my first place in 1998. I paid 295,000 for my current house back in 2010, the house across the street just sold for 950,000. I could reasonably get 700,000 for mine. In Washington State that is just not the case. How many hours a week do you want my 18 year old to work? All of them? The average rent around here is 1800 to 2200 dollars a month. The average home price is $582,000 in Kitsap county. I am all about working and making earning extra when you can, but housing has out paced wages at least in the area I live in. Puget Sound naval Shipyard has an average starting salary of about 25 bucks an hour, the largest employer in the county. Lets say you work 60 hours a week, even then you can't afford a 582,000 dollar house. You can't compare what you did to what it cost to live today. Just for reference I am 49. Right in the middle of Gen X. I don't like any of you...

 

[Blackstack]

If you can say how that might help. Are you talking about a fast dip because of Covid? That is a dip, but the rate was still high. Look at the graphs and compare.
There is nothing in your post that contradicts anything. Are you referring to the biggest decline in history as a contradiction? It is not. It declined 1.1% One point one percent and what was going on during that 1.1% ? Covid and still the ownership rate was at its highest point than in the last decade.

This is not my article, these are statistics. Cant spin statistics. Check the numbers. Ownership rate never went below 63% since the 1960s and never near the level of the 1950s

Cant spin statistics.

That is one of the more naive things I have heard in a while.


“statistics are like bikinis. What they reveal is suggestive, but what they conceal is vital.”

 

[alarmguy]

Yeah, that’s the common assumption. Yet look at the boomers, literally everything was handed to them on a silver platter. But they worked so hard, unlike those lazy millennials.

It is always someone else's fault when someone fails at something, always has been, always will be. Throughout history unsuccessful people blame successful people for their failures and why they fail.

 

[alarmguy]

....I am all about working and making earning extra when you can, but housing has out paced wages at least in the area I live in. ...

Throughout history is has always been this way. (not directed at you) If you cant afford to live in an area, then move to an area you can afford. There are tons of places in the USA. Throughout history, real estate has skyrocketed in desirable places. When it does, if you cant afford it, you move to a place and job where you will be able to afford it.
Thats what is great about this country, there is a place and a home for anyone that wants to work.

 

[ls1mike]

GON, another thought. There is some growth of popularity towards manufactured homes vs. stick built. Manufactured homes are not mobile homes......so we need to first set that record straight.

Yeah but some lenders are picky about "Manufactured" homes. The VA, prior to rise of cost in housing, was super picky about it.

 

[alarmguy]

And now apply that to a median home worth 400-500k and see how fast you can pay it off even at a cheap 3% interest.
Your price to income was very good, it is not the same today. Something most old timers don’t seem to grasp. All they seem to look at is their high interest rates.

It is the same, nothing has changed except social media for those to whine. Youth have never had it more easy.

 

[thastinger]

I remember buying my first house I saved a down payment by working around the clock hustled any side money I could make. Had zero debt and sold my car bought a beater. Buying a home is doable with sacrifice to get in the door. I don't think the new young ones are willing to sacrifice.

Concur. Back in 93 when I bought my first house, I was single and didn't make enough money for the house I wanted to buy, so I sold my matching numbers 69 SS Camaro and my 79 Harley Cafe Racer to come up with the rest.
We (married with family now) still live in the house and it is long since paid off...it can be done.

 

[KrisZ]

It is the same, nothing has changed except social media for those to whine. Youth have never had it more easy.

Yeah you guys sacrificed so much, walked to school uphill both ways etc.
Tell your kids to pay off their houses in 2-5 years starting now. See how they react. If presume they are hard workers

 

[gfh77665]

You can’t ignore the fact it’s quantitatively less affordable now to buy a house than ever. Your feelings about generational attitudes are irrelevant in light of the hard numbers.

You are totally ignoring the difference in the housing, too. My parents had a 950 sq. ft. 2-1 on cinder blocks with wood ship lap siding, no central HVAC, old asbestos tile floors and formica counters.

A generation later my 1989 home was 2000 sq. ft., all brick, cathedral ceilings, ceramic tile and granite countertops. Todays McMansions have no limit. 3000+ ft., connectivity, 10 ft, ceilings, super well insulated, top quality everywhere and everything. THATS what people miss when comparing housing values. Lets compare apples to apples.

Lastly my 30 something friend at work cries so much about "how hard it is" today. He lives in one of thoses big houses, buys a new F-150 every 2-3 years, vapes, drinks starbuck coffee, and is all tatted up. He owns several motorcycles and 4 wheelers and more expensive guns than I can count, just for kicks. I did none of the above.

 

[alarmguy]

Yeah you guys sacrificed so much, walked to school uphill both ways etc.
Tell your kids to pay off their houses in 2-5 years starting now. See how they react. If presume they are hard workers

Yup, it's always someone else's fault. My kids were raised not to rely on others but on themselves and make it happen, not whine about someone else. My son bought his own house before I did at his age. Granted talking to you is like talking to a wall *LOL* Good luck!

 

[KrisZ]

A generation later my 1989 home was 2000 sq. ft., all brick, cathedral ceilings, ceramic tile and granite countertops. Today’s McMansions have no limit. 3000+ ft., connectivity, 10 ft, ceilings, super well insulated, top quality everywhere and everything. THATS what people miss when comparing housing values. Let’s compare apples to apples.

Could a young couple do what you did when they bought YOUR house?

 

[Hillbilly Deluxe]

One of the main reasons why "housing is so expensive today" is that there's not many 25, 30 and 40 year olds wanting to live in a 30 year old house that hasn't been updated and brought up to 2023 standards as far as style, interior colors, kitchen and bath fixtures, countertops and commercial refrigerators.

It's almost like they are entitled to buy a nearly new or recently renovated home at "starter home" prices...

 

[KrisZ]

Yup, it's always someone else's fault. My kids were raised not to rely on others but on themselves and make it happen, not whine about someone else. My son bought his own house before I did at his age. Granted talking to you is like talking to a wall *LOL* Good luck!

So could he pay off his current house in 2.5 years as the poster I was originally replying to, or not.

Don’t avoid the question.

 

[alarmguy]

You are totally ignoring the difference in the housing, too. My parents had a 950 sq. ft. 2-1 on cinder blocks with wood ship lap siding, no central HVAC, old asbestos tile floors and formica counters.

A generation later my 1989 home was 2000 sq. ft., all brick, cathedral ceilings, ceramic tile and granite countertops. Todays McMansions have no limit. 3000+ ft., connectivity, 10 ft, ceilings, super well insulated, top quality everywhere and everything. THATS what people miss when comparing housing values. Lets compare apples to apples.

Lastly my 30 something friend at work cries so much about "how hard it is" today. He lives in one of thoses big houses, buys a new F-150 every 2-3 years, vapes, drinks starbuck coffee, and is all tatted up. He owns several motorcycles and 4 wheelers and more expensive guns than I can count, just for kicks. I did none of the above.

This is a great point, the standard of living and what people expect is fine, as long as they can afford it but then the whiners come along if they cant have it all.

 

[SubieRubyRoo]

Watching prices, days to contract after listing, etc, I see single family homes continue to rise in 2024, and sell for all time record highs.

Homes that have good floor plans and are priced right, will go under contract in under five days. Bidding wars will be common for homes with good floorplans. Housing will continue to set record high selling prices.

I suspect the way to get a "value" price on a home is to build it yourself. Tons of risks and challenges being a contractor. But I see no relief in prices for homes with good floorplans on a MACRO basis in 2024. Instead, I see all time record high prices.

Of one market, I am amazed at the strength of the Arizona market- mind blowing strong, to include remote and not well-designed single-family homes.

I hope you’re right. I read an article from a guy who’s been in the market for 40some years (of course I can’t remember where I found it), but his recommendation is get every investment into cash before May (or at least out of stocks, for now). He called it an “everything bubble” and predicted that the markets including RE will crash to levels lower than the bottom of 2008. He predicted a decade to decade and a half to get back to where we are today.

Is he right? Maybe. There were a lot of financial indicators he referenced, and that part is over my head. He did, however, temper the doom and possible panic with this: he said “if I’m wrong and things don’t crash, you get back into the market by September or so… you’re out a few percent or so. But if you stay in, I predict there will be losses exceeding 80% in some sectors.” Paraphrasing of course.

I’m torn, because I’m up about 166% over the past 5 years, vs S&P at around 114%. But I also don’t want it to evaporate overnight either. I may move the riskier funds into something safer, but we’ll see. I’ve still got about 15-20 years before I’ll need my 401k, so I can afford a little risk for now.

 

[alarmguy]

So could he pay off his current house in 2.5 years as the poster I was originally replying to, or not.

Don’t avoid the question.

Avoid what question? Please state, I dont know a person on earth who paid a house off in 2.5 years. I think your off the rails or something (*LOL*
SO ask a logical question and I will be glad to answer it. Once you do, I will not answer to your demands any further, you can bet others see it too.
Edit: Never mind, Im not answering more, clearly your down on the world and do not see the opportunity this country affords those who work at it. My kids included and those of everyone I know.
(cant bring a horse to water and BITOG does not want these discussions sounding like arguments )

 

[ls1mike]

You are totally ignoring the difference in the housing, too. My parents had a 950 sq. ft. 2-1 on cinder blocks with wood ship lap siding, no central HVAC, old asbestos tile floors and formica counters.

A generation later my 1989 home was 2000 sq. ft., all brick, cathedral ceilings, ceramic tile and granite countertops. Todays McMansions have no limit. 3000+ ft., connectivity, 10 ft, ceilings, super well insulated, top quality everywhere and everything. THATS what people miss when comparing housing values. Lets compare apples to apples.

Lastly my 30 something friend at work cries so much about "how hard it is" today. He lives in one of thoses big houses, buys a new F-150 every 2-3 years, vapes, drinks starbuck coffee, and is all tatted up. He owns several motorcycles and 4 wheelers and more expensive guns than I can count, just for kicks. I did none of the above.

But that isn't everyone. My house is 1700 square feet on an acre and 1/4. Formica counter tops, vinyl floors, vinyl windows and laminate. You are making a very large generalization about people and housing. In my area my house will sell for anywhere between 600,000 to 700,000. There is nothing special about my house. Central Air and T-111 siding. Smaller than your house even. Most of the work force at PSNS and Bangor are Gen Z and Millennials. They all work hard and are filling the gap the retiring boomers are leaving (who by the way will get 80 percent of their base pay. Me? I will get about 40 percent. If my kid choses to work there he will get less). Welders, Electricians, electronics techs, you name it. Doing the same job. They just don't bet paid enough to purchase the median priced home here.

 

[GON]

I hope you’re right. I read an article from a guy who’s been in the market for 40some years (of course I can’t remember where I found it), but his recommendation is get every investment into cash before May (or at least out of stocks, for now). He called it an “everything bubble” and predicted that the markets including RE will crash to levels lower than the bottom of 2008. He predicted a decade to decade and a half to get back to where we are today.

Is he right? Maybe. There were a lot of financial indicators he referenced, and that part is over my head. He did, however, temper the doom and possible panic with this: he said “if I’m wrong and things don’t crash, you get back into the market by September or so… you’re out a few percent or so. But if you stay in, I predict there will be losses exceeding 80% in some sectors.” Paraphrasing of course.

I’m torn, because I’m up about 166% over the past 5 years, vs S&P at around 114%. But I also don’t want it to evaporate overnight either. I may move the riskier funds into something safer, but we’ll see. I’ve still got about 15-20 years before I’ll need my 401k, so I can afford a little risk for now.

I think he is partially right. The US will never see a doctrinal recession again. Whoever is hurting, regardless of faut or reason, will be bailed out. Every passing of spending requires major earmark projects for every congressional district.

Without getting political, one can only print money for votes for so long. I think a complete economic collapse is very feasible, but the result will be mega inflation, Argentina like. Those with hard assets will have some protection.

Through the 1970s, many middle class Americans worked 5 1/2 to six days per week. Are Americans willing to work more to get the US economy strong if a collapse happens? I hope so, but .......